Bob Kieber
Special to the Daily

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September 1, 2012
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Financial Facts: Consider resale before you buy

Almost every client of mine asks me if I think they are getting a good deal on the real estate they are buying. I try to get around answering that question by asking them a simple question, that being do they think they will get back what they have in the property when they sell it.

Now I know that some people think this is a stupid question to ask before they even buy the property, but it should be a consideration in the decision-making process. I for one hope to sell my real estate for more down the road and I know of no one who really wants to sell the property for less. If you do know someone who has those expectations, please contact me immediately.

The reason I ask the question is to get the potential buyer to think that some day they too may want to sell the real estate. Real estate is in my mind an investment and it is one investment that I hope to see increase in value. The other reason I want the buyer to look at future value has to do with the ease of finding a mortgage for the buyer down the road.

A prime example is developers who are looking at building mixed-use properties. Mixed-use properties are ones that have both commercial and residential units under one roof. Some of these properties are very easy to finance as the commercial percentage of the total square footage of the building is well less than 20 percent. A prime example would be many of the condo buildings in Keystone. The first floors are commercial, housing restaurants, liquor stores, ski shops and other commercial businesses. Since a small percentage is commercial space, lenders have little problem with this type of usage.

On the other hand, there are buildings that are two-story structures and 50 percent of the buildings are commercial and the other 50 percent are residential. Fannie Mae and Freddie Mac lenders just hate these types of structures. In fact, if the commercial space exceeds 20 percent of the total square footage, Fannie and Freddie will not lend on the residential units.

So this is the reason that I suggest current buyers look at the potential resale value of the property. If the current buyers have problems finding a lender due to the real estate itself, why would a buyer down the road have any fewer problems getting a mortgage?

For answers to your mortgage related questions call Bob Kieber at (970) 453-4700 or email him at rkieber@centennialbanking.com. Bob is a local mortgage lender with Centennial Bank. He has 30-plus years of professional experience in real estate, finance and investments, and is a longtime resident of the High Country. Member FDIC, Equal Housing Lender. NMLS Bank #401640 Broker #289610. For tax benefit information please consult with a professional tax advisor. The opinions expressed are those of the individual, and do not necessarily reflect those of Centennial Bank.


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The Summit Daily Updated Sep 1, 2012 12:05AM Published Sep 1, 2012 12:04AM Copyright 2012 The Summit Daily. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.